CGC Environmental Justice Advisory Board Comments on Passage of the Inflation Reduction Act

Today, the Coalition for Green Capital’s Inaugural Environmental Justice Advisory Board weighed in on the passage of the Inflation Reduction Act.

The Act will provide $27 billion to the Environmental Protection Agency for the Greenhouse Gas Reduction Fund, including $20 billion designated for a non-profit green bank which will make direct investments with private sector partners to reduce greenhouse gas emissions and will indirectly fund such public-private investing through the American Green Bank Consortium and not-for-profit financial institutions. In addition, $8 billion of the $20 billion will be targeted to low- to medium-income communities.

William Barber III, Chief Consultant of Environmental Justice and Equity, said: “At $369 billion, this Act is the largest investment in climate solutions in history. It is also the largest investment in environmental justice at $60 billion dollars. Despite these historic numbers, this is still less than the 40% delegation of direct benefits promised in the J40 initiative and there must be serious concern about the impact some of the concessions in the Act will have on communities on the frontlines of industry and the climate crisis. This Act gives us a window to begin shifting momentum, but the $60 billion dollar carve out, including the allocation for a clean energy accelerator, must be the floor, and not the ceiling of federal action on climate change and environmental justice.” 

There are multiple benefits in housing the funds in one national nonprofit financial institution as opposed to many, including that this would allow the entity to maximize the total power of this investment, empowering the entity to operate at a scale that would lower the cost of additional capital and facilitate recycling of the initial investment through financial leverage. Housing the funds under one big umbrella would allow effective standardization of financial products and processes and would help guarantee benefits to disadvantaged communities.

Members of the CGC’s inaugural Environmental Justice Advisory Board provided comments: 

Raya Salter, founder of the Energy Justice Law and Policy Center and a member of the New York State Climate Action Council said: “We know that frontline communities have historically and persistently suffered chronic disinvestment, exacerbating systemic injustice and inequity. Black, brown and low-income communities bear the brunt of dirty energy infrastructure, resulting in catastrophic health, social and economic outcomes. In order to achieve a just clean energy transition, we must change these trajectories of harm and open access to capital that results in community-level investment, ownership and self-determination. This will require deep and principled outreach to new community ecosystems, a culture of accountability and proven yet innovative approaches to financing. The capitalization of a national green bank – one with a demonstrated commitment and mandate for energy justice – offers an opportunity to drive real dollars into frontline communities on an unprecedented scale.”

Sharlene Brown, Senior Fellow at Croatan Institute and director of the Institute’s initiative on Racial Equity, Economics, Finance, and Sustainability, spoke to the importance of ensuring investments in communities resulted in direct benefits: “When we think about the communities we are serving, it is critical that we think of the possibility of communities as co-owners in deployed projects, not simply new markets for deployment/investment. With this historic level of investment we must ensure that we fully embrace the concept of financial inclusion and hold ourselves accountable to the needs and desires of the communities being served. The national green bank would allow us to structure standardized community contracts that accomplish this not only for the current effort, but cements it in economic theory for the future.” 

Jesse Glickstein, Environmental & Human Rights Counsel at Hewlett-Packard, spoke of the opportunities to more effectively include communities in the clean economy: “Access to the emerging supply chain of clean energy products and services is critical to providing historically marginalized communities the opportunity to not only survive, but to thrive and compete in the future. The urgency of the climate crisis forces us to think hard about how we achieve electrification and decarbonization not at the expense, but at the benefit of communities on the frontlines. It is critical that members of these communities have a central seat at the table as pivotal stakeholders in shaping this historic investment opportunity, which can act as a key to unlocking additional financing and investment opportunities often not available to frontline communities. 

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